In the burgeoning business of streaming television shows, Hulu has long been viewed as the distant runner-up to Netflix.

But with Walt Disney Co. poised to take a controlling stake in Hulu, the little 10-year-old streaming service once known solely for airing reruns of broadcast shows online could eventually become a credible threat to Netflix’s dominance.

Disney would own 60 per cent of Hulu if its proposed $52.4 billion purchase of 21st Century Fox is approved by regulators. Hulu is currently equally owned by Fox, Disney and Comcast, each of which has a 30 per cent stake. (Time Warner owns the other 10 per cent.)

If Disney’s acquisition of Fox closes in 2019, Hulu is expected to become a pillar of Disney CEO Bob Iger’s strategy to take on streaming video insurgents that are disrupting the traditional media industry.

The deal could give Disney a leg up in its plans to introduce its own streaming services. Disney is planning to launch two such services in the next two years - one for sports content, the other for Disney-branded offering powered by brands such as Marvel, Pixar and Lucasfilm.

Hulu would be another important part of the strategy to compete for consumers who are cutting the cord. In a business driven by the volume of quality content, Disney could boost the service’s standing with more shows. Hulu, which operates only in the US and Japan, could also expand internationally under Disney’s watch and benefit from the company’s marketing clout.

“Hulu is a major asset that could propel Disney’s streaming machine,” Daniel Ives, an analyst for GBH Insights, said in a research report. “The acquisition of the Fox entertainment assets and a controlling stake of Hulu would make Disney a much more formidable and dangerous competitor down the road on streaming.”

Iger signalled his ambitions for Hulu on Thursday. In a call with analysts, he said Hulu would be the destination for more grown-up shows and movies that would be misfits on a more family oriented Disney service.

As part of the Fox sale, Disney would control the 20th Century Fox movie and television studio, which produces much material at odds with the Mouse House’s squeaky-clean reputation. Fox makes such movies as “Logan,” “Deadpool” and “Alien: Covenant,” and TV shows including “Family Guy” and “The Simpsons.” Disney would also take over FX Productions, known for “Archer” and “Fargo.” Another boon for Hulu could be prestigious independent movies from Fox Searchlight.

“What we envisioned is actually taking Hulu and making it basically the home of adult programming where the ABC product would go, where the FX product would go, where the output of the studios that was not branded Disney, Marvel, Pixar, et cetera would go,” Iger told analysts.

For now, Netflix is the undisputed champion of streaming TV. Subscribers spend more than 140 million hours a day on the platform, whose successful shows include “Stranger Things” and “House of Cards.” The company had nearly 110 million subscribers worldwide as of Sept. 30. Hulu says it has 47 million viewers, but does not break out the number of subscriptions.

Netflix is outspending both Hulu and Amazon, which has also been making a push into the content business. Netflix is expected to spend as much as $8 billion on content next year, dwarfing the $2.5 billion Hulu invested in 2017. Amazon had an estimated $4.5 billion content budget this year.

Yet, Hulu has been had more buzzworthy success after years of playing catch-up to its two bigger rivals. The joint venture has received critical praise for some of its original shows, such as “The Handmaid’s Tale,” which this year became the first streaming show to win the Emmy for best drama.

Hulu recently strengthened its lineup with shows such as teen superhero show “Marvel’s Runaways” and sci-fi comedy “Future Man,” both of which premiered on the service last month.

“Hulu is a distant third but it has established itself as a significant player with great offerings,” said Peter Csathy, founder of advisory firm Creatv Media.

However, Hulu’s rise has not been a smooth one. The traditional media companies launched Hulu as a joint venture in 2007, but have rarely agreed on how to court digital audiences.

Hulu changed its leadership in October, even with signs that it was gaining traction. The company hired high-level Fox television executive Randy Freer as its chief executive to replace Mike Hopkins, who moved to Sony Pictures Entertainment.

A key question is whether Disney will have the appetite to weather the financial losses at Hulu. It has invested heavily in programming in recent years to take on Netflix. Hulu has been losing hundreds of millions of dollars a year as it makes more original programming and also buys rights to multiple seasons of hit network shows such as “This is Us,” people familiar with the matter said. Hulu lost $560 million in the first nine months of this year, according to an estimate by BTIG Research media analyst Richard Greenfield.

Also unclear is whether Hulu will be able to renew its programming agreements with the various broadcast networks, including NBC, which is owned by Comcast, before a Disney takeover. Those agreements - under which the broadcast network partners allow Hulu to stream their current season episodes - run another year or two, which means they would be up for renegotiation about the time that Disney would take over the service.

Netflix said it was too soon to tell whether Disney and Hulu would pose a serious challenge.

“It’s early days,” a spokesperson said in an e-mailed statement. “There is a lot still to understand about this deal and it’s implications for consumers.”

Comcast, Hulu and Fox declined to comment. Disney did not respond to a request for comment.

But consolidating Hulu might not be a slam dunk for the Disney deal, which will face a grueling regulatory review before it is consummated.

Analysts say ownership of Hulu would be one of the most problematic aspects of the deal from an antitrust perspective. US Justice Department antitrust regulators have become increasingly concerned about protecting the growth of streaming, known in the industry as “over-the-top” services, because they bring content into homes outside the traditional conduit for pay-TV - the cable box.

Given the importance of streaming in the entertainment equation, the Justice Department might ask Disney to divest Hulu.

“Any form of content exclusivity which limits competition is likely to be looked at closely by regulators,” Kannan Venkateshwar, a media analyst with Barclays, said in a note to clients.

Hulu became a particular concern as the Federal Communications Commission and the Justice Department were considering whether to allow the nation’s largest cable provider Comcast’s deal to buy NBCUniversal seven years ago. NBCUniversal was a founding partner of Hulu and regulators were worried that Comcast would use its muscle to thwart the development of the streaming service because it competes with Comcast’s existing business.

To get its NBC deal approved, Comcast in 2011 had to agree to be a silent partner in the Hulu pay-TV service for seven years. That means Comcast-NBC has been forced to sit on the sidelines as the streaming market has swelled.

However, beginning next summer, the handcuffs will be removed from Comcast, and the company will be allowed to influence decisions at Hulu.

Comcast’s active participation is expected to complicate an already messy situation because the companies have never been able to agree on a cohesive strategy for Hulu. Comcast, according to several analysts, would have little incentive to be helpful to Disney’s strategy.

“Hulu’s ownership structure has been a mess since it was created,” Greenfield said. “And even with Disney acquiring Fox, its future may remain uncertain.”